Correlation Between Finnair Oyj and Ion Beam
Can any of the company-specific risk be diversified away by investing in both Finnair Oyj and Ion Beam at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Finnair Oyj and Ion Beam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Finnair Oyj and Ion Beam Applications, you can compare the effects of market volatilities on Finnair Oyj and Ion Beam and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Finnair Oyj with a short position of Ion Beam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Finnair Oyj and Ion Beam.
Diversification Opportunities for Finnair Oyj and Ion Beam
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Finnair and Ion is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Finnair Oyj and Ion Beam Applications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ion Beam Applications and Finnair Oyj is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Finnair Oyj are associated (or correlated) with Ion Beam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ion Beam Applications has no effect on the direction of Finnair Oyj i.e., Finnair Oyj and Ion Beam go up and down completely randomly.
Pair Corralation between Finnair Oyj and Ion Beam
Assuming the 90 days trading horizon Finnair Oyj is expected to generate 0.9 times more return on investment than Ion Beam. However, Finnair Oyj is 1.11 times less risky than Ion Beam. It trades about 0.15 of its potential returns per unit of risk. Ion Beam Applications is currently generating about 0.07 per unit of risk. If you would invest 222.00 in Finnair Oyj on September 13, 2024 and sell it today you would earn a total of 15.00 from holding Finnair Oyj or generate 6.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Finnair Oyj vs. Ion Beam Applications
Performance |
| Timeline |
| Finnair Oyj |
| Ion Beam Applications |
Finnair Oyj and Ion Beam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Finnair Oyj and Ion Beam
The main advantage of trading using opposite Finnair Oyj and Ion Beam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Finnair Oyj position performs unexpectedly, Ion Beam can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Ion Beam will offset losses from the drop in Ion Beam's long position.| Finnair Oyj vs. Samsung Electronics Co | Finnair Oyj vs. Samsung Electronics Co | Finnair Oyj vs. Hyundai Motor | Finnair Oyj vs. Reliance Industries Ltd |
| Ion Beam vs. Samsung Electronics Co | Ion Beam vs. Samsung Electronics Co | Ion Beam vs. Hyundai Motor | Ion Beam vs. Reliance Industries Ltd |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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